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The Satellite News Financial Ticker

By | July 26, 2004

      Week of July 16 – 22, 2004
      Percent Change
      Symbol
      July 22 Price
      One Week
      One Month
      Three Month
      Year to Date
      Operators
      APT SATELLITE HLDGS ATS
      1.58
      (4.2)
      (16.4)
      (6.0)
      (33.6)
      ASIASAT TELECOM SAT
      16.98
      2.3
      4.8
      2.9
      (10.5)
      BRITISH SKY BROADCASTING BSY
      46.00
      1.4
      0.5
      (7.9)
      (9.7)
      ECHOSTAR COMM -CL A DISH
      29.09
      (1.8)
      (3.4)
      (14.6)
      (14.4)
      THE DIRECTV GROUP DTV
      16.99
      (0.1)
      1.1
      (2.0)
      2.7
      LORAL SPACE & COMM LOR
      0.09
      (50.6)
      (34.1)
      (83.5)
      (71.7)
      NEWS CORP NWS
      34.98
      (0.3)
      (3.7)
      (7.1)
      (3.1)
      NEW SKIES SATELLITES NSK
      7.72
      (0.1)
      0.1
      5.9
      7.8
      PANAMSAT SPOT
      23.30
      0.1
      1.1
      0.3
      8.1
      PASIFIK SATELIT NUSANTARA PSNRY
      0.14
      (6.7)
      (36.4)
      180.0
      PEGASUS COMMUNICATIONS PGTV
      23.88
      (2.9)
      51.0
      9.6
      (15.0)
      SES GLOBAL SESF.LU
      7.00
      (0.7)
      0.1
      (10.3)
      (12.5)
      SIRIUS SATELLITE RADIO SIRI
      2.50
      (4.9)
      (16.7)
      (28.0)
      (20.9)
      XM SATELLITE RADIO XMSR
      25.00
      (5.4)
      9.4
      (7.5)
      (4.9)
      Operators’ Average 100.00
      (5.3)
      (3.0)
      (10.6)
      0.2
      Manufacturers
      ANDREW ANDW
      14.90
      (9.7)
      (20.1)
      (27.7)
      28.6
      BALL BLL
      70.01
      (3.6)
      (0.4)
      1.2
      17.5
      BOEING BA
      47.30
      (4.1)
      (4.4)
      15.8
      12.2
      COM DEV INTL *CDV
      3.28
      (2.1)
      31.2
      13.9
      EMS TECHNOLOGIES ELMG
      15.23
      (1.0)
      (19.6)
      (19.0)
      (25.9)
      GARMIN GRMN
      33.79
      (3.9)
      8.1
      (15.9)
      (38.0)
      GILAT SAT NETWORKS GILTF
      4.09
      (12.4)
      (35.1)
      (47.1)
      (16.4)
      GLOBECOM GCOM
      5.19
      (7.7)
      10.9
      (5.1)
      9.3
      HARRIS HRS
      46.57
      (3.5)
      (1.5)
      (4.0)
      22.7
      HONEYWELL HON
      36.63
      3.3
      1.0
      7.8
      9.6
      KVH KVHI
      8.27
      (7.1)
      (41.1)
      (38.0)
      (70.0)
      LOCKHEED MARTIN LMT
      53.44
      (1.1)
      5.8
      16.2
      4.0
      LUCENT TECHNOLOGIES LU
      3.31
      (4.9)
      (6.0)
      (16.4)
      16.5
      MOTOROLA MOT
      15.61
      (6.8)
      (11.0)
      (19.1)
      11.5
      ORBITAL SCIENCES ORB
      12.95
      (1.9)
      (4.1)
      2.5
      7.7
      QUALCOMM QCOM
      72.55
      4.2
      10.8
      10.2
      34.5
      RAYTHEON RTN
      32.59
      (3.4)
      (6.2)
      3.1
      8.5
      ROCKWELL COLLINS COL
      33.35
      (4.5)
      2.7
      4.8
      11.1
      SCIENTIFIC-ATLANTA SFA
      29.91
      0.4
      (8.2)
      (8.4)
      9.6
      SKY FRAMES SKYU
      0.05
      (50.0)
      (50.0)
      (50.0)
      TITAN TTN
      12.17
      (3.9)
      (35.1)
      (37.7)
      (44.2)
      TRIMBLE NAVIGATION TRMB
      23.11
      (3.1)
      (14.9)
      (1.4)
      (6.9)
      VIASAT VSAT
      18.15
      (12.4)
      (20.3)
      (23.8)
      (5.2)
      Manufacturers’ Average 100.00
      (3.8)
      (10.5)
      (9.6)
      (1.7)
      Nasdaq Composite Index
      Nasdaq comp
      1,889.06
      (1.3)
      (4.3)
      (5.3)
      (5.7)
      SP 500 sp50
      1,096.84
      (1.3)
      (3.0)
      (2.4)
      (1.4)
      SN Stock Price Average 100.00
      (4.3)
      (7.7)
      (10.0)
      (1.0)

      Wall Street Analysis

      By Tom Watts, SG Cowen Securities

      Yesterday, SBC reported it added 100,000 EchoStar subscribers in 2Q04, the first full quarter it had marketed the DISH service to its telephone customer base. While the telcos have launched satellite initiatives in the past — with little success — this time the situation is different.

      It’s no secret that the long-term battle for household communications will be between the telcos and the cablecos. Cable companies offer an integrated package of video, high- speed data and, increasingly, voice. To defend their voice business, telcos have added high-speed DSL, and they now are looking for video to complete the bundle.

      The most aggressive telcos, i.e., Verizon are building out fiber to the home (FTTH) using the fiber-to-the-premises (FTTP architecture), and they also plan to launch video products. However, it may be 10 years before they even reach 50 percent of their homes. Even the meeker telcos like SBC are using FTTP for new builds, but have they chose the less capable fiber-to-the-neighborhood (FTTN) architecture for existing homes, and they are not in a rush to roll out it out aggressively. This leaves a video hole in the telcos’ portfolio for at least the next decade. Satellite will be there to fill it.

      Some investors have questioned whether the satellite companies can make money in this partnership. In the SBC/DISH Network combination, SBC picks up a large portion of the subscriber acquisition costs, and it gets a revenue share in return. We estimate DISH may only receive about $40 per month from a SBC subscriber rather than the $52 it gets from its regular subs. This could squeeze pre-marketing cash flow margins down to 32 percent from their current 42 percent. However, we also believe DISH’s cost to acquire these subs is only about $160 vs. $530 for a regular sub.

      The question continues to be whether SBC should acquire DISH? SBC already has a nationwide wireless business. It could add a nationwide voice business through voice-over-IP (VOIP) technology. Last week, we also saw the interesting move by Verizon of launching a nationwide VoIP business, which could prod such competitors as SBC to follow suit. Nationwide video from the telcos via DBS could come next, but we aren’t holding our breath.

      Tom Watts is a managing director and satellite analyst at SG Cowen Securities. He can be reached at 212/278-4260 or by e-mail at tom.watts@sgcowen.com. Readers should assume that SG Cowen Securities Corp. and/or its affiliates intend to offer services in investment banking to the above referenced companies within the next three months, and to seek compensation for such services.

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